Economic Buzz: IMF says Fed?s task is complex, highlights resilience in US labor markets

Julie Kozack, Director of the Communications Department, IMF has stated that the US economy has proven to be resilient in the past few years. However, high-frequency data indicate moderating domestic demand and low consumer and business sentiment in the US. There was a strong front-loading of imports into the US in the first quarter. And that, in anticipation of tariffs led to an important drag on growth in the first quarter. At the same time, the US labor markets remain resilient, and the unemployment rate remains relatively low.

With respect to inflation, she noted that the IMF sees inflation on a path towards the Fed's 2 percent target, but it is subject to upside risks. And that means that the Fed's task is complex given the very highly uncertain economic environment. She opined that Fed will need to take into account both policies undertaken by the US administration, as well as incoming data in, and of course, data on potential wage pressures.

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